President Oil-Bama

The President wants to know what's up with oil and gas prices skyrocketing.

"We are going to make sure that no one is taking advantage of the American people for their own short-term gain," Obama said at a town hall meeting in Reno, Nev.

He vowed that a broad government task force under Attorney General Eric Holder would "root out any cases of fraud or manipulation" in gasoline prices — "and that includes the role of traders and speculators."

Financial speculation is widely considered to be a possibly prime factor driving up global oil prices. Despite turmoil in the Middle East, there's been no significant interruption of oil production, and supplies remain abundant. Meanwhile, financial institutions have been purchasing contracts for future oil delivery as an investment strategy, driving up prices.

Other factors believed contributing to the rising prices are fear of future supply interruption rising from Middle East turmoil and projections of rising oil demand as the global economy recovers.

Obama's under political pressure to address gasoline prices that are nearing an average of $4 a gallon. The average price of regular this week hit $3.84 per gallon, according to AAA, up 30 cents in a month and almost a dollar from a year ago.


A McClatchy-Marist poll this week showed that only 11 percent of drivers blame Obama and the Democrats. Still, the sticker shock at the pump likely contributed to a drop in Obama's overall job approval and a big increase in the ranks of Americans who feel the country's headed in the wrong direction — a significant political barometer now at the worst level since November 2007.

Yeah, even I believe that this is almost solely motivated by Obama swinging into campaign 2012 mode.  But it doesn't mean there's not a legitimate concern here.  Gasoline stockpiles are well within normal ranges and in fact were at much higher than normal levels this Spring.  If anything, oil companies, seeing the high stockpiles of gasoline, have idled refineries this month in order to work through the oversupply.

Yet gasoline prices have jumped by almost a third in two months.  Funny how that works.  The last time gasoline inventories were dropped this much?  You guessed it, Summer 2008's record gasoline prices as oil companies tightened supplies to raise prices even more before the whole speculation pyramid caved in.

I fully expect another oil crash this summer...right about the time we run into a larger financial crash.  If Obama wants to really investigate the oil companies, let's start with getting serious about the billions in taxpayer subsidies they get while making tens of billions in quarterly profits.